AGA Exam CGFM Topic 4 Question 65 Discussion

Actual exam question for AGA's CGFM exam

Question #: 65
Topic #: 4

[All CGFM Questions]

A state transfers cagh to a broker and the broker transfers securities to the state, promising to repay the cash plus

interest in exchange for the return of the same securities. This transaction is an example of

Aan arbitrage agreement.

Ba repurchase agreement.

Ca mutual buy-sell agreement.

Da reverse repurchase agreement.

US. Department of the Treasury, Guide to Federal Investments.
Financial Accounting Standards Board (FASB), Accounting for Repurchase Agreements.

Show Suggested Answer

Suggested Answer: A

by Felix at Jan 23, 2025, 02:50 AM

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Adolph

1 months ago

Hey, at least they're not asking about derivatives this time. I'd be completely lost in that financial maze!

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Latrice

1 days ago

C: D) a reverse repurchase agreement.

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Barney

5 days ago

B: Yeah, derivatives can get pretty complicated.

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Mayra

18 days ago

A: B) a repurchase agreement.

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I can't believe they're asking about repurchase agreements on this exam. It's like they're trying to trip us up with all these financial jargon! But I'm going to go with B) because it sounds the most like what's described.

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Lavonda

4 days ago

Yeah, B) seems like the most logical option based on the scenario.

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Almeta

15 days ago

I think B) is the best choice too, it matches the description given.

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Nguyet

16 days ago

I agree, these questions can be tricky with all the technical terms.

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Theodora

16 days ago

I think you're onto something with D), it does sound like a reverse repurchase agreement. Let's see what the correct answer is.

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Thurman

18 days ago

I'm not sure, but maybe it's D) instead? It sounds like it could be a reverse repurchase agreement.

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Nan

19 days ago

I agree, these questions can be tricky. But I think you're right, B) seems like the best choice.

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Ressie

2 months ago

I'm not sure, but I think it could also be D) a reverse repurchase agreement, where the broker sells securities to the state with an agreement to repurchase them later.

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Allene

2 months ago

This is a tricky one! I was tempted to go with A) an arbitrage agreement, but the mention of the state transferring cash and the broker transferring securities makes me think B) a repurchase agreement is the correct answer.

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Vincent

3 days ago

Exactly, it's a common practice in the financial markets.

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Honey

8 days ago

So, it's like a short-term loan with securities as collateral.

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Kiley

12 days ago

I agree, it involves the transfer of securities for cash with a promise to repurchase.

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Carma

1 months ago

I think B) a repurchase agreement is the right choice.

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Amber

2 months ago

I agree with Rochell, because in a repurchase agreement, securities are sold with a commitment to repurchase them at a later date.

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Tran

2 months ago

Hmm, I'm not sure about this one. The wording is a bit confusing, but I'm leaning towards D) a reverse repurchase agreement. Isn't that when the broker sells securities to the state and promises to buy them back?

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Raylene

16 days ago

Reverse repurchase agreement seems to be the most fitting option here, given the context of the transaction.

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Luisa

17 days ago

I agree, it definitely sounds like a reverse repurchase agreement based on the scenario.

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Chana

2 months ago

Yeah, that makes sense. The broker selling securities and promising to buy them back matches the description.

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Valentine

2 months ago

I think you're right, it does sound like a reverse repurchase agreement.

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Kenda

2 months ago

I think the answer is B) a repurchase agreement. The description matches the definition of a repo, where the state sells securities to the broker and agrees to buy them back later with interest.

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Rochell

3 months ago

I think the answer is B) a repurchase agreement.

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AGA Exam CGFM Topic 4 Question 65 Discussion

Contribute your Thoughts:

Adolph

Latrice

Barney

Mayra

Irma

Lavonda

Almeta

Nguyet

Theodora

Thurman

Nan

Ressie

Allene

Vincent

Honey

Kiley

Carma

Amber

Tran

Raylene

Luisa

Chana

Valentine

Kenda

Rochell